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1. What is PSB?
Personal Service Business or 'incorporated employee'
It usu. applies to a scenario where there is only one employee in one corporation, who serve very limited number of client, usu. just one.
CRA put restriction on the expenses which can be deducted by the business.
Allowed deduction are limited to:
1. salary and benefit
2. amount re. selling of properties and negotiation of contract
3. legal expenses incurred to collect account
Basically, deductibility of expenses is almost the same as a normal employee. The purpose is to discourage tax evasion by artifically incorporating one's business.
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